Alexander Friedman is Chief Executive Officer of GAM. He has also served as Global Chief Investment Officer of UBS, Chief Financial Officer of the Bill & Melinda Gates Foundation, and a White House fellow during the Clinton Administration.

Actually the state of the economic science is clear when we have a former high placed IB that completly ignores that Schumpeter has been disproved long while ago and that the economics of innovation have nothing to do with creative destruction but with incremental upgrades. Read more

There is consideration that was left out in the discussion, and it's this: Capitalism is based on perpetual growth BUT no 'closed system' can grow in perpetuity. And we are a closed system. We have a single planet with limited resources that took millions of years to form and which we are consuming in a very short time.

I like readers to consider what will happen if you keep on inflating a balloon. How long before it will blow up? What will happen to our global economy when we consume the last aviation fuel, because liquid hydrocarbons is the only energy-rich fuel able to propel a metal object with large payload in the air and keep it there? What would the World economy be like if planes can no longer fly? We know what happens a Vulcan erupts in Europe and grounds planes for a few days. Read more

Professor Richard Wolf recomends all businesses should be structured as a co-0p so workers receive their fair share of a company's gross income. It takes at least five things to grow a business. Management, capital, labor, profits, and customers. Management is in control of receipts, so they get what they want out of profits. Capital gets what they want because they have a contract in hand before any capital changes hands. Each business should guarantee labor their split of profits by contact before the doors are open to the customers. The same way co-op businesses are set up to save capitalism. Customer get what they want when they purchase the product or sevice. In the US most companies guarantee satisfaction or the customer receives their money back. Currently it is only labor that must continually fight for their fair share of profits. This is why Prof. Wolf believes that labor gets a fairer deal at co-op businesses. Read more

Marxism is a total failure for many reasons, but mostly because it is not about economics -- it's politics and its a nasty sort of politics. Orwell's Animal Farm is still the best critique of the sort of system Marx advocated. Read more

We live in an age where a rising tide lifts all yachts. We suffer from a lack of aggregate demand which is caused by the hollowing out of the middle class and by both them and the poor having no spare cash after household bills are paid. Increasing the money supply through QE is like pushing on a string. No-one will borrow to invest in producing goods which no-one has any spare cash to buy. Tax cuts for corporations and the rich won't add to demand. The 90% at the bottom of the pile need a fairer share from the 10% and increasingly the 1% at the top of the tree. Read more

When are you people going to get it, Laissez Faire capitalism is toxic for everyone but the ultra rich. Everyone but the top 10% has seen their lives get worse and worse as neoliberalism took over. When the banks collapsed the 10%ers got bailed out while everyone else was struggling to find work while there house got foreclosed on. Europe is about to implode thanks to austerity. The gig is up, voters are sick and tired of propping up corrupt elites who make their lives ever worse. Read more

Trump was elected to liberate the American people from the nightmare world of the cosmopolitan elite. The cosmopolitan elite has been both infinitely greedy and unbearably smug for decades. The people of the UK and now the USA have revolted against their oppressors. The gated-community crowd have trashed the lives of ordinary people without mercy. Now the unprotected are rejecting the unfounded arrogance of the protected. It is called Democracy. For years, the elite has been able to shutdown all debate on trade, immigration, failed multiculturalism, Open Borders, PC by just shouting "racism", "sexism", "bigotry", etc. Of course, PC has always been a tool for elite exploitation of the people. This year, the people stopped listening Read more

What is the point of saying that Trump-, whose investments are cosmopolitan, he is invested in Azerbaijan!- was 'elected to liberate the American people' from some wholly private nightmare of yours?You are a foolish man. Don't troll your betters. Read more

Have you actually talked with Brexit supporters or have you just read a few propaganda articles? The UK result was down to 2/3 of the EUs population increase being dumped in one place as a result of from the Supremacism of a German led block, which effectively felt no need to respond to a UK electorates wishes. In effect the UK had lost control of its borders and was and is being used as a colony. There is no rejection of international trade by the UK, rather the threat of a trade war by Germany and its allies is likely to cause what is in effect retaliatory sanctions in order to cause as much harm as possible out of revenge, spite and maiice. "Popularism is now used by anti democratic oligarchs to discredit and ignore democracy, Brexit is a political rebellion against foreign domination not an agitation for trade protection. Read more

You want to save globalization but I think you fail to see it cannot survive in its current form. In its current form it is on a one way path towards unsustainable inequality and exclusion. Globalization 1.0 is bankrupt. Globalization first needs to be reinvented into an inclusive model. Until then welcome to our new caretakers, the nationalists and mercantilists of yesteryear. Read more

What we do know is that global totalitarianism, socialism, and radical environmentalism which were slowly being woven into a fabric of a "new world order" has suffered a major blow by the Brexit and Trump votes.After WW II, the U.S. significantly helped rebuild the Western European and allied Asian economies. The U.S. did the same for China when they decided to abandon Maoist/Communist economic programs for market based solutions. Industrial innovations occurred outside of the U.S. that eventually outpaced and out sold the older facilities producing steel, etc., domestically. So now that the "Art of the Deal", free market capitalism forces have beaten the Progressive, Socialist Democratic cadres, a new American Renaissance can begin. With the ability now to utilize the plentiful sources of energy and ambition, we can modernize our industrial & manufacturing sectors while using the latest innovations to rebuild our infrastructure and cities. Turning our government into a lean, cost effective public institution that minimizes strangling the private markets by reducing the size to GDP ratio, reducing unnessesary regulation, and reducing the over expansion resulting from cavalier notions regarding the Commerce Clause, should be a stimulus unto itself.We are modern enough to incorporate cost effective, energy efficient, minimal environmental footprint, and sane architectural design into a domestic, commercial, and industrial renaissance fit for the 21st Century. To infinity and beyond on a successful push of a new paradigm of concious capitalism. Read more

Over the last several years the "stop globalization" movement has gained support in developed countries across the world. The subject of globalization is made up of many threads interwoven in a complex way, the discussion can include several issues such as, but not limited to, immigration and free trade.

Other social concerns also feed into the mix, things like global warming, nationalism, inequality, even population growth. The article below explores this complex issue and questions whether it is justified.

http://brucewilds.blogspot.com/2016/07/is-stop-globalization-movement-justified.html Read more

Obama, to his credit, did have a plan to lift real wages for the Rustbelt. The GOP vetocracy stopped him. He did manage a lot of stealth reform of a wonkish type as the incoming administration is slowly learning. However, there is absolutely no reason why you can't have a 5 per cent real wage increase for the disaffected over the first 18 months. The thing was always do-able. In the past, the theory was that the perception among poorer whites was that they'd gain proportionally less. I think that perception has changed. The GOP would be preternaturally foolish if they didn't use the next 18 months to solidify their recent gains.Incidentally, in what Universe is 'the electorate of the United Kingdom' in the 'hands of populists'? Theresa May- a populist? BoJo- former editor of the Spectator? Gove- Telegraph columnist?Farage's career in Blightly is over. He thinks Trump will find a place for him. But who is Trump appointing? Jess Ventura? Nope. We all know it's gonna be Steven Seagal at State. How else can 'Global Capitalism' be saved? Read more

VI, the Bush/Obama/Hillary plan was always to flush middle-America down the drain for fun and profit. Remember NAFTA? the WTO? the TPP? Open Borders? "Refugees"? The Bush plan amounted to "we are greedy and we don't care what happens next" (Obama as a it turns out). The Obama/Hillary plan was to destroy Middle-America and wipe out the Middle-Class. They assumed that the "Emerging Democratic Majority" of minorities, young people, single women, people with advanced degrees, etc. would give them a majority now matter how brutal and greedy they were. Did Obama/Hillary elect President Trump? Of course, they did. Did they intend to elect President Trump? Of course, not. Read more

@ Peter Shaeffer- You write 'Obama's plan for the Midwest was to eliminate all of the remaining jobs with the TPP and replace any remaining works with illegals.' In other words Obama deliberately paved the way for the Democratic defeat. Why write such nonsense? Whom do you think will be taken in by it? Read more

What a joke. Obama's plan for the Midwest was to eliminate all of the remaining jobs with the TPP and replace any remaining works with illegals. That was the always the real Obama/Hillary plan. Raise real wages? How about reduce them to zero. Obama wasn't shy about his plans for destruction. Take a look at his "bitter clinger" comments and where he made them (at a fund raiser on billionaires road). Read more

Interesting article, in that it captures the mainstream corporate and academic thought process so compactly. It goes without saying this way of thinking fails to comprehend the problem, and thus fails to understand the underlying process driving the global capitalism crisis. As such, it cannot possibly offer solutions to the deep rot that has settled into the system.

What voters in democracies finally understand -- not because they've spent years thinking about it, or being trained to think about it in a particular way -- is that their respective governments no longer represent them or their interests. They've arrived at this conclusion by living their everyday lives. This knowledge is visceral -- the vast majority of these voters play by the rules, they pay their taxes, they send their sons and daughters to war, they go to the unemployment offices when they lose their jobs, they pull their kids from college, they clip coupons, they pay their debts, ... Their respective governments are not helping them navigate the loss of jobs brought on by poorly thought-out trade deals that have hollowed out their communities. They receive no help in maintaining their homes or incomes while they regain their footing. Their kids are forced to attend sub-par schools, which leaves them disadvantaged for life. These folks pay the price for the the weak thought-processes that produce the destructive fiscal (taxation and redistribution) and monetary policies that are pursued by their governments, which are oblivious to what they're doing to the bedrock of their societies. This is the 90% of of the income distribution in just about every society. When markets move against them, they are on their own. They are impoverished.

The other 10% -- in particular the top 1%, and within that the top 0.1% of the income distribution -- lives by an entirely different set of rules. When competition -- the hallmark of capitalist systems -- threatens the franchises producing the income and wealth of this stratum of society (e.g., banking, pharma, energy, defense, ...), entire governments are mobilized to protect the income and wealth of these very narrow interests.

We've all watched as bankers, for example, destroyed their companies with reckless and fraudulent lending and trading, and nearly collapsed the global economy. Governments rightly acted to fight this collapse, but they also moved heaven and earth to protect the wealth of this upper stratum in a blatant and craven way, forcefully and frequently maintaining these bankers did nothing wrong, to paraphrase B. Obama in the years immediately following the crisis. The fact that the FBI testified before Congress in 2004 that fraud and corruption in the mortgage markets literally was epidemic -- from banks raising debt for and lending to bucket-shop mortgage brokers all the way thru to packaging toxic mortgages into AAA securities -- was completely ignored. This was four years before the global financial crisis metastasized. Surely the Obama administration could not believe the fraud and abuse had been rectified in those four years. The fact that the Fed flooded the markets with zero-cost money, and seized the company at the center of this collapse (AIG) so it could pay off the "hedges" of its banking constituents was observed by everyone with slack-jawed amazement. The bankers were literally rescued by a flood of money and credit, and by the taxpayer-funded government literally stepping in to perform on the obligations of a bad actor. The cherry on the sundae was the massive QE launched by the Fed and other central banks, which was nothing more than a massive wealth transfer to the bankers and other investors who quickly figured out the Fed could be front run on this with no risk.

A capitalist market would have wiped out the equity -- and the wealth -- of these bankers. In a real market, their stupidity would have assured their extinction. It's a good and healthy form of Darwinism.

A government dedicated to maintaining the integrity of its markets and its laws would have launched a vigorous prosecution of the legions of bad actors in banking, broking, ratings agencies, and regulatory agencies that completely and totally failed to execute their mandates (cf, the OTS and the SEC -- the former was quietly put to death, while the latter continues to protect and serve the very firms it is supposed to police. Forget about the Fed -- it's literally owned by these banks and wholly accountable to them first and foremost -- and the other regulators. The people that populate these agencies are sleepwalking for 30 years hoping to retire without having to do anything of any substance, or they're tirelessly pursuing employment at these banks.)

The media, in a competitive market, would be relentless in exposing this corruption. Instead the media fetes and fawns over the people running these institutions. Largely because the media likes that these banks -- and other protected interests -- are so willing to buy advertising on their outlets. Can't risk that. Wouldn't want to compete for readership or viewership by actually producing a product that informs.

And the academics -- if they truly were doing honest research -- would be studying how to identify these market failures, how to expose this profound corruption, and how best to regulate competitive markets in a way that allows these markets to do their absolutely necessary work of efficiently allocating scarce resources. Instead, the research agenda has been purchased by these very interests, and the academy relentlessly churns out trivial supporting arguments for these institutions, which are repeated with great gravitas by the hacks who are interviewed by the fawning media. Nobel laureates spend entire careers fawning over these people and trying desperately to defend their actions. This is all driven by self-interest -- they have to convince gullible young people to spend their parents' money attending their schools, and they've got to keep the donors and alums -- many of whom occupy seats in these government-sponsored entities like banks -- happy and, importantly, writing checks.

We need to open the discussion of capitalism up a bit, as is apparent to anyone with a pulse. These compact defenses and laments don't really advance that cause. Nor do they get us any closer to understanding how this still persists, despite its obvious failure and rot. Read more

Bravo. Very well said. I would add two items. 1- the legality of what constitutes fraud or insider trading or fiduciary responsibility are legislated. Our Fed and state legislators have created rules that a moron could get around. No one was prosecuted because the rule of law was defined for their benefit not that of their victims or society at large. 2 - you leave out the wholesale theft, monopoly and bankruptcy caused by opec etc in pricing oil starting in 1973. It went unchallenged and forced a retreat from Bretton Woods. That inflation really got the party started. And it was Fed by the resulting unbridled ''financial '' engineering made possible by gold's removal from its trade stabilizing role. There is one dimension worth considering.We are all tribal but different tribes because of their different survival/prosperity mechanisms have different tribal parameters and rules of interpersonal engagement. These different interpersonal parameters are reciprocally influenced by macroeconomic parameters. A less bcumbersome way of stating this rather complicated and multilayered thought is: people have different values and develop different needs based on their societal surroundings. One of the greatest disparities of these societally affecting values is the urban rural divide. My clinical work has increasingly focused on this for the last 20-25 years. It is now growing in the western world's spotlight because of the surprise/upheaval of America's vote results. What accounts for the differential urban-rural attitudes, needs, concerns, anger, and values that are reflected in our country's government-wide republican victory? It is clearly not restricted to The Donald vs Ms Hillary.Nor is it restricted to our country. I propose that it is a world-wide phenomena of long standing but with more recent effects. England, France, Italy, China, and other poli-economic entities are faced with two tribes that predictably divide on many factors. However these two tribes may be most easily identified by their geographies. Hence the maps that describe the counties that favored Democrats vs Republicans. City mouse tribe vs country mouse tribe. Absurd? Only to the demographically blind and deaf.Consider these quotes from this Reuters.com article. It doesn't consider other aspects of the rural-urban divide in all countries, only America.

REUTERS/NICK OXFORDBy Nick Carey | JANESVILLE, WISC...."The last few years, there hasn't been much optimism and hope among working people in rural areas in this country," said Lader, 65, who lives in the farmland outside the southern Wisconsin city of Janesville....The different worlds ... help illustrate the rural-urban divide that was critical to the outcome of Tuesday's U.S. presidential election....''A country once defined by regional voting now is more clearly divided by the differences between rural and urban voters. The combination of a strong Trump turnout in the countryside and a weak showing by Democrat Clinton in the cities went a long way toward deciding the election.'' ...

''Rural and small-town working-class white voters, who already tended to vote Republican, propelled Trump. Urban areas, where black and Hispanic voters are concentrated along with college-educated voters, already leaned toward the Democrats, but Clinton did not get the turnout from these groups that she needed.''...''Trump beat Clinton by 26 percentage points among voters who live in non-metropolitan areas, while Clinton bested Trump by about 7 percentage points in urban areas, according to the nationwide Reuters/Ipsos national Election Day poll.''...'THE PERFECT SLOGAN'Steven Schier, a political science professor at Carleton College in Northfield, Minnesota, said rural voters "feel they've lost something, that America is moving away from them."..."Trump came up with the perfect slogan for them in 'Make America Great Again' because it hits them exactly where they live," Schier said....''Democratic presidential candidates had won in Wisconsin in every election since 1988, until Trump's victory on Tuesday.''...

Sir, if you read posts I hope that you also read mine. There's no such thing as "aging population". If Trump scared people with Muslims and immigration then some of the authors are scaring people with "aging"... Exactly how many people do we want to have on this planet (living in extreme poverty, famished, thirsty etc.) in order to "save capitalism"? If TRump is a chauvinist, then you, who advocate "demographics" do you care of the women in underdeveloped countries and the number of children they are supposed to have in order to "save global capitalism"? Is "global capitalism" a goal of the man kind or is a new, dark divinity asking people to sacrifice their sons and daughters to a new Moloch through a life of misery. The intellectual and human quality of such articles is ludicrous. I hope that you are not paid for such ravings. Read more

Global capitalism with balanced trade is sustainable. Global capitalism with large recurring trade imbalances is a Ponzi scheme. You say you want to fight for a Ponzi scheme? Just manage globalization properly and that means balanced trade for example. Read more

A fight for global capitalism and against populism appears here like a reasonable way forward. What I want to add, is that there may be more fundamental forces, albeit not yet well analysed and defined, at work. There is a more detailed elaboration in my account's biography. I abstain from begging but I promise, that in my imagination reading it has a fair probability of being highly rewarding.Here a short glimpse:Mr. Trump, like most other of the populist leaders, is about to liberate subgroups for existential reasons. This is understandable but problematic, as other ignored subgroups that get damaged will be inclined to liberate themselves as well. Spiralling with nukes.A rule-of-thumb for a way out of this dilemma may be:

"Technological innovation and demographics are now a headwind, not a tailwind, for growth, and financial engineering can’t save the day." Meditate on this nonsense, dear reader, and the real problem will become clear. Read more

You know you folks screaming and whining about global capitalism would not be this position if you had spread the gains of "Globalization" and before you talk about lower prices allow me to point out lower prices mean nothing if you have NO JOB. A very very few benefited from Globalization a large number lost basically everything and were reduced to poverty to lift China & Mexico out of poverty nice for China & Mexico, But you know my government is supposed to represent my interests not those of China & Mexico. And we hate you for sacrificing our interests for those corporations and well connected who benefited. The only boats lifted by the rising tide were yachts. And you people wonder why those of us sodomized for the benefit of the 1% and corporate bottom line hate globalization with a passion. Look around it made most of our lives infinitely worse and we hate it in proportion. One not Mr. Friedman there have been plenty of productivity gains in the last 30- years yet not one thin dime went to anybody outside of the executive suites. I didn't vote for Trump I doubt he will change a damn thing but I don't blame those who did. But globalization in the western countries has benefited less then 5% of the population and you wonder why the rest of us hate it? Read more

At least put American citizen's interests above those of Mexico, China, and India. And who knows maybe even above those of Apple and Chase Manhattan. The problem the center right and left both have Republican and Democrat alike is all that is being offered is that Status Quo. Which is to say trying to grab the porcelain while going in a circle. Bluntly any change is likely to be an improvement. We have Government of by and for the rich and has Trump proved by naming Goldman Sachs to be treasury secretary there isn't going any improvement another 4 years of Wallstreet getting what they want and the rest of us getting crumbs at best. Democracy as practiced isn't going to change a damn thing because the parties have a stranglehold on power and like the current setup just fine thank you. Read more

I suspect it's to late for any redistribution to get through congress. And if it did and I find it more likely I can falp my arms and go to Mars. It would be like TAA (Trade Adjustment Assistance) a whole of sound bytes for cameras and a whole lot of nothing for the people. The fuse is lit the explosion is probably inevitable. As I said maybe Globalization lifted a whole lot of people out of poverty I don't know. And I don't give a damn. What I care about is being reduced to minimum wage work at 50 odd years old after I have 2 jobs, shipped to India and Malaysia respectively and being forced to train my H1B replacement at a 3rd to collect my severance pay. You know, At this point I would not piss on a Chinese or a Mexican if they were on fire. My interests were sacrificed and my life utterly destroyed to benefit Mexico China and the big donors to both parties. Sacrifices need to made is the mantra from the people who don't have to sacrifice. Trade is a zero sum game just look at the rust belt or any number of dead and dying towns in the US, & the UK, frankly the case for globalization as made the rich, the politicians and the "Experts" has been a case of pissing on my back and telling me it's raining. Last but not least if the last election is pretty much absolute proof democracy is deader then the Passenger pigeon. If Trump & Clinton is the best leadership the oligarchy I mean democracy can offer I'll take fascism maybe we could have leadership that can find their hind end with both hands and the 82nd Airborne. Read more

Globalisation 1.0 increased intra-country inequality in some countries (mainly the USA) but reduced inter-country inequality. In 20 years, almost 1 billion people (1-in-6 of the world’s population) were lifted out of the most destitute poverty level – a feat unmatched in history.

Scrapping globalisation may relieve the middle classes in the West of the immediate pressure of cheaper Asian labour competition. But the longer-term costs to themselves and their countries, let alone to the poor in Asia and Africa, will be high. Trade is not a zero-sum game.

What went wrong was the top 10%’s capture of the political process in the West, especially in the USA. Globalisation’s losers in the West are seemingly faced with a choice between plutocracy + globalization — or authoritarian populism + a halt to globalization. It doesn’t need to be this way.

The alternative requires a wresting of our democracies back to the 90%, followed by more substantial redistribution policies in the rich world. Some of the gains of the top 10% could go toward alleviating the anger of the lower-and middle-class rich world’s “losers.” These should not be mere transfers of money from one group to another. Instead, money should come in the form of investments in public education, local infrastructure, housing and preventive health care. Read more

PS On Air: The Super Germ Threat

NOV 2, 2016

In the latest edition of PS On
Air
, Jim O’Neill discusses how to beat antimicrobial resistance, which
threatens millions of lives, with Gavekal Dragonomics’ Anatole Kaletsky
and Leonardo Maisano of
Il Sole 24 Ore.

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